New Orleans World Trade Center lease up for City Council vote

Posted on: May 7 2015 | Posted in: Latest News

By Katherin Sayre, NOLA.com

The New Orleans City Council is expected to vote Thursday (May 7) on leasing the former World Trade Center building to developers planning a Four Seasons hotel and condo for the vacant tower. 

A 124-page agreement with Carpenter & Co. and Woodward Interests would allow the developers to take over the building for the next 99 years. 

The Four Seasons team was a city-appointed selection committee's top choice among five finalists, all proposing hotels, earlier this year. It's the fourth attempt since the 1990s to revive the vacant 1960s era building.

Carpenter and Woodward Interests plan a $364 million, 350-room Four Seasons with 76 hotel-serviced residences. Their design also adds two wings to the building.

The City Council is expected to vote around noon today.

According to the proposed lease introduced to the council last month, payments to the city:

  • $1 million nonrefundable deposit at lease signing and a $4 million deposit in escrow that goes to the city once financing closes. 
  • Monthly interim rent during construction of $100,000.
  • After the hotel opens, yearly rent of $3.25 million for the first 10 years and $3.75 million for the second decade. After that, rent goes up with inflation.
  • Starting in the fourth year, 5 percent of gross revenues from a cultural attraction focused on New Orleans history planned for the building. 
  • Starting in the 11th year, 5 percent of gross revenues from all other components of the project, without exceeding certain limits: 10 percent of base rent in years 11 through 20; 15 percent of base rent in years 21 through 50; and 25 percent of base rent in years 51 through 99.

In any year in which real estate taxes on the property go over a certain mark -- $3 million for the first decade, $3.5 million for the second decade -- rent will be reduced by 60 percent of the excess in taxes over the thresholds. Rent will never go below $2 million. 

In the event developers ever sold condos, the hotel or the cultural attraction, they would have to pay the city 2.5 percent of the net proceeds from the sale.